DOWNING Street is bracing itself for further revelations about Cherie Blair's connections with convicted conman Peter Foster as the embarrassing furore yesterday refused to subside.

The prime minister had hoped his wife's statement on Thursday would draw a line under the controversy surrounding her purchase of two Bristol flats.

However, her comments served only to stoke up trouble for the government when it emerged that her version of events was at odds with an exchange of e-mails at the heart of the row.

More shocks were in store when the police said last night that the accountant who arranged Mrs Blair's mortgage on the two flats was awaiting trial at the Old Bailey on fraud charges.

Andrew Axelsen, recommended to Mrs Blair by Mr Foster, has been charged following an investigation into the awarding of contracts for the construction of the London Underground's Jubilee Line extension, British Transport Police said.

Mr Axelsen's co-defendant is Martin Williams, a solicitor suggested by Mr Foster to do the conveyancing on the property deal. In the event, Mrs Blair appointed another solicitor.

The prime minister's official spokesman yesterday repeatedly refused to explain the disparity between the stories, claiming the substance of the matter was that ''nothing illegal or improper took place''.

He would not be drawn on suggestions that Mr Foster paid up to (pounds) 4000 of accountants' fees, out of his own pocket, on Mrs Blair's behalf.

In a statement issued on Thursday, Mrs Blair claimed Mr Foster's involvement in her purchase of two flats had only been ''for a couple of weeks''.

However, leaked e-mails revealed he had been involved for at least six weeks, from October 20 to November 29.

''This was a perfectly proper, legal transaction in which nothing extraordinary or illegal took place,'' the spokesman said. ''Mrs Blair is just as entitled to her privacy and not to have wild allegations made.'' But despite his plea, allegations are expected to surface this weekend.

Asked to state categorically that he stood by Mrs Blair's statement in all its details, the spokesman replied: ''In terms of Mrs Blair's statement, it is there.

''In terms of is there any proof that anything was done that was illegal or improper and therefore of legitimate public concern, the answer is no. Mrs Blair's statement stands, and we stand by it.''

The prime minister refused to comment on the affair yesterday when he visited an NHS centre in Bristol, the city where the Blairs' eldest son, Euan, is at university and where the two flats were purchased last week.

Mr Blair's spokesman said there was always a ''tension between what is legitimately public and legitimately private. If you have to reveal more and more of what is legitimately private to answer false allegations, then that does create problems''.

He added: ''If there was anything about this transaction which was illegal, improper, out of step with normal practice, then that becomes a matter of legitimate concern.''

When it was put to him that it was out of step with normal practice to use the boyfriend of a friend of a spouse to negotiate a property purchase and allegedly pay thousands of pounds of fees out of his own pocket, the spokesman replied: ''I think many people use the advice of different people when going through a house purchase. Nothing illegal or improper took place.''

Meanwhile, it was business as usual for the prime minister's wife, who presided over a trial at Isleworth Crown Court yesterday.